Solar Finance
mini grids

EQUITY - AD INVESTORS

Third party investors can invest their money into solar power project equity as alternative investments. Solar power projects have consistent rates of return and have minimal technology risk. Additionally, the investor can avail accelerated depreciation benefit as per Section 32 of the Income Tax Act which currently stands at 80% of the invested capital with tax liability in the first year and 20% in the second year of operations. This benefit will be revised to 60% in the first year and 40% in the second year from April 2017 onwards.

BENEFITS:

  1. Solar energy is a sustainable, renewable energy source that we will never run out of it. It is about as natural a source of power as it is possible to generate electricity.
  2. Generation based incentives and other supportive schemes or subsidies are provided by the government to the developers from time to time.
  3. Income tax Act, 1961 allows solar power generating companies a tax waiver on 100% of profits for 10 Assessment years (from initial assessment year) under section 80-IA (sub section 4) during first 15 years of its operational life. The same is valid for the plants commissioned till 31st March, 2017.
  4. The Break Even Point (BEP) of any solar power plant is around 3-4 years, after which a long & stable income is generated for a period of 25 years.
  5. Import duty and Excise duty exemption on solar plant equipment like solar panels, inverters and other items are available in the country.
  6. Ministry of Environment & Forests allows participation in “Certified Emission Reduction” (CER) Credits to the companies which are registering themselves for the same, which can be traded in the international market.
  7. For power generating companies it is also easy to fulfill their RPO obligations by switching to solar power.
  8. During operation solar electricity power plants produce zero emissions and it is in no way hazardous for the environment. Also it is helping in reducing global warming.
  9. It is a proven fact that the cost of establishing a solar power plant is reducing day by day as it has reduced by almost 50% in past 5 years due to the continual advancements in solar panel technology which are increasing the efficiency and lowering the cost of production.

DEBT

Given the significantly high prevailing rates of interest in India and relative inexperience of financial institutions with the solar industry, securing debt financing for solar projects in the country is a notoriously difficult affair. PlaySolar has relationships with both local and international organisations that can assist with getting your project on the ground at the lowest possible costs of debt

BENEFITS:

  1. Debt structuring, leveraging existing equity
  2. Arranging collateral for debt
  3. Buyers credit on major components
  4. Buyers credit extensions

WORKING CAPITAL FINANCING

As an installer or a developer with a growing pipeline of projects working capital management becomes a huge bottleneck. PlaySolar provides the necessary assistance in cash flow management via working capital financing as loans, cash advances and lines of credit with minimal paperwork.

BENEFITS:

  1. Renewable Energy lending under Priority Sector Lending
  2. Support in minimizing Cost of funds, maximizing Tenor of funds (our debt funds are upto 3 years), providing Risk sharing (will help expand faster) and support in Building in house capacity
  3. Provide access to finance to energy access entrepreneurs who operate in rural areas who lack access to energy.
  4. Meet working capital needs of the entrepreneurs to scale up.
  5. Provide affordable cost of capital.

BRIDGE FINANCING

If you are a smaller scale solar EPC firm and do not have access to large reserves of liquidity, PlaySolar can help out with bridge financing options that are loaned out against your expected inflows of cash, either at the end of the project commissioning or through subsidies at a later stage. Why aren’t big banks stepping up for bridge financing small EPC players? The reason that big banks are not stepping up is simple. The size of each deal is relatively small. For a solar EPC that has been doing residential projects that wants to sign a 100kW deal, it’s a huge sum of money for the solar EPC, but not a large sum for a bank.

BENEFITS:

  1. Bridge financing provides small solar PV firms the ability to offer better credit terms to a client because they can get cash on day 1
  2. cash rebates or customer payments as collateral
  3. purchase equipment and pay for labor.
  4. can use this cash to purchase equipment and can bill the client later.
  5. provides liquidity at the beginning of the project which is when they have limited amounts of cash

PRODUCT FINANCE

PlaySolar can make adopting solar easier for home owners for providing product finance options that will help you set flexible payment terms to pay for your system over a comfortable period of time.

BENEFITS:

  1. Flexible payments
  2. Control of the interest
  3. Control of the term
  4. Consumer Credit cover for deposit and guarantee
  5. Least initial outlay (nil deposit)
  6. 1st repayment not until one month after completion
  7. Low affordable minimum payment
  8. Simple application process
  9. Keep your savings intact for a rainy day

PAY-AS- YOU-GO

PAYG systems provide the ultimate in flexibility of use for solar systems. An initial down payment secures you the system of your choice and multiple payment options will allow you to top-up your account as per the consumption patterns that you observe. You also have the additional benefit of owning the PV system at the end of the tenure, meaning free electricity!

BENEFITS:

  1. Financial inclusion for the off-grid rural communities
  2. Many people can't take out loans for productive uses (say, buying a sewing machine to make clothes and generate extra income), that could improve their lives
  3. There is a wide gulf between being creditworthy in principle and in practice
  4. It's a classic conundrum: without credit history, you can't get credit; if you can't get credit, you can't build credit history.
  5. PlaySolar manages a cloud-based PAYG software platform called CloudSol, which integrates directly with mobile money platforms (like PayTM and PayUMoney) and provides a suite of online services to help distributors manage and streamline PAYG financing of solar energy systems.